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Philippine lawmakers worry China Telecom may be a 'Trojan horse'

MANILA, Jan 17 (Reuters) - Opposition members of the Philippine Congress raised concern on Wednesday that China Telecom Corp Ltd, which may enter the Philippine industry, could be a "Trojan horse" aimed at giving China access to state secrets.

The Southeast Asian country aims to name a third telecom operator within the first quarter that will break the duopoly of PLDT Inc and Globe Telecom Inc. State-run China Telecom has been named as a possible investor in that third entity.

President Rodrigo Duterte, who has warned both PLDT and Globe to shape up or face competition, has welcomed Chinese entities specifically to become the third telecoms operator.

Beijing has selected China Telecom to invest in the Philippines, according to Philippine officials, but it would need to partner with a local company as it cannot operate alone under the law.

China Telecom's presence in the Philippines, however, does not sit well with some lawmakers, given China's telecommunications expertise and sophisticated technology.

Despite Duterte's warm relations with China, the Philippines has a long history of mistrust of it, due largely to its maritime assertiveness and its challenges to Philippine claims of sovereignty over various islands, reefs and waters.

"While we agree that telecommunications and connectivity are serious problems in our country, it behooves us to scrutinize the China deal," the House minority bloc said in a statement.

"Is China Telecom a Trojan horse?"

The lawmakers sought a congressional inquiry and cautioned the government against rushing into any deal.

"Giving China access to the country's communications infrastructure is a serious threat to national security," they said, adding that even the United States was aware of such risk.

Two U.S. lawmakers introduced a bill this week that bars the U.S. government from using or contracting with Chinese telecom firms Huawei or ZTE Corp.

In Beijing, foreign ministry spokesman Lu Kang told reporters on Thursday that the Philippines' decision to allow Chinese telecoms firms to operate in the country showed the deepening trust between the two nations.

China has always asked its companies to respect the laws of the countries they work in, and also asks these countries to provide them the "necessary, friendly conditions and environment" in which to operate, he added.

The Philippine Department of Information and Communications Technology (DICT) sought to allay the lawmakers' concern on Wednesday.

A National Cybersecurity Plan is in place to provide measures and controls against security risks, DICT Assistant Secretary Allan Cabanlong told Reuters.

"Rest assured that there is no problem. What is important is that we are focused on the development of the country," he said. (Additional reporting by Neil Jerome Morales in MANILA and Ben Blanchard in BEIJING; Editing by Martin Petty, Robert Birsel)